ANNEX
B


EXPORT-IMPORT
BANK OF THE UNITED STATES

WORKING CAPITAL GUARANTEE PROGRAM


BORROWER
AGREEMENT


          THIS
BORROWER AGREEMENT (this “Agreement”) is made and entered into by the entity
identified as Borrower on the signature page hereof (“Borrower”) in favor of
the Export-Import Bank of the United States (“Ex-Im Bank”) and the institution
identified as Lender on the signature page hereof (“Lender”).


RECITALS

          Borrower
has requested that Lender establish a Loan Facility in favor of Borrower for
the purposes of providing Borrower with pre-export working capital to finance
the manufacture, production or purchase and subsequent export sale of Items.

          It
is a condition to the establishment of such Loan Facility that Ex-Im Bank
guarantee the payment of ninety percent (90%) of certain credit accommodations
subject to the terms and conditions of a Master Guarantee Agreement, the Loan
Authorization Agreement, and to the extent applicable, the Delegated Authority
Letter Agreement.

          Borrower
is executing this Agreement for the benefit of Lender and Ex-Im Bank in
consideration for and as a condition to Lender’s establishing the Loan Facility
and Ex-Im Bank’s agreement to guarantee such Loan Facility pursuant to the
Master Guarantee Agreement.

          NOW,
THEREFORE, Borrower hereby agrees as follows:

ARTICLE
I

DEFINITIONS

1.01   Definition
of Terms.  As used in this
Agreement, including the Recitals to this Agreement and the Loan Authorization
Agreement, the following terms shall have the following meanings:

          “Accounts
Receivable” shall mean all of Borrower’s now owned or hereafter acquired
(a) ”accounts” (as such term is defined in the UCC), other receivables,
book debts and other forms of obligations, whether arising out of goods sold or
services rendered or from any other transaction; (b) rights in, to and under
all purchase orders or receipts for goods or services; (c) rights to any
goods represented or purported to be represented by any of the foregoing
(including unpaid sellers’ rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods);
(d) moneys due or to become due to such Borrower under all purchase orders and
contracts for the sale of goods or the performance of services or both by
Borrower (whether or not yet earned by performance on the part of Borrower),
including the proceeds of the foregoing; (e) any notes, drafts, letters of
credit, insurance proceeds or other instruments, documents and writings evidencing
or supporting the foregoing; and (f) all collateral security and guarantees of
any kind given by any other Person with respect to any of the foregoing.










          “Advance
Rate” shall mean the rate specified in Section 5(C) of the Loan Authorization
Agreement for each category of Collateral.

          “Business
Day” shall mean any day on which the Federal Reserve Bank of New York is open
for business.

          “Buyer”
shall mean a Person that has entered into one or more Export Orders with
Borrower.

          “Collateral”
shall mean all property and interest in property in or upon which Lender has
been granted a Lien as security for the payment of all the Loan Facility
Obligations including the Collateral identified in Section 6 of the Loan
Authorization Agreement and all products and proceeds (cash and non-cash)
thereof.

          “Commercial
Letters of Credit” shall mean those letters of credit subject to the UCP
payable in Dollars and issued or caused to be issued by Lender on behalf of
Borrower under a Loan Facility for the benefit of a supplier(s) of Borrower in
connection with Borrower’s purchase of goods or services from the supplier in
support of the export of the Items.

          “Country
Limitation Schedule” shall mean the schedule published from time to time by
Ex-Im Bank and provided to Borrower by Lender which sets forth on a country by
country basis whether and under what conditions Ex-Im Bank will provide
coverage for the financing of export transactions to countries listed therein.

          “Credit
Accommodation Amount” shall mean, the sum of (a) the aggregate outstanding
amount of Disbursements and (b) the aggregate outstanding face amount of Letter
of Credit Obligations.

          “Credit
Accommodations” shall mean, collectively, Disbursements and Letter of Credit
Obligations.

          “Debarment
Regulations” shall mean, collectively, (a) the Governmentwide Debarment and
Suspension (Nonprocurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May
26, 1988), (b) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the
Federal Acquisition Regulations, 48 C.F.R. 9.400-9.409 and (c) the revised
Govemmentwide Debarment and Suspension (Nonprocurement) regulations (Common
Rule), 60 Fed. Reg. 33037 (June 26, 1995).

          “Delegated
Authority Letter Agreement” shall mean the Delegated Authority Letter
Agreement, if any, between Ex-Im Bank and Lender.

          “Disbursement”
shall mean, collectively, (a) an advance of a working capital loan from Lender
to Borrower under the Loan Facility, and (b) an advance to fund a drawing under
a Letter of Credit issued or caused to be issued by Lender for the account of
Borrower under the Loan Facility.

          “Dollars”
or “$” shall mean the lawful currency of the United States.

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          “Effective
Date” shall mean the date on which (a) the Loan Documents are executed by
Lender and Borrower or the date, if later, on which agreements are executed by
Lender and Borrower adding the Loan Facility to an existing working capital
loan arrangement between Lender and Borrower and (b) all of the conditions to
the making of the initial Credit Accommodations under the Loan Documents or any
amendments thereto have been satisfied.

          “Eligible
Export-Related Accounts Receivable” shall mean an Export-Related Account
Receivable which is acceptable to Lender and which is deemed to be eligible
pursuant to the Loan Documents, but in no event shall Eligible Export-Related
Accounts Receivable include any Account Receivable:

          (a)     that
does not arise from the sale of Items in the ordinary course of Borrower’s
business;

          (b)     that
is not subject to a valid, perfected first priority Lien in favor of Lender;

          (c)     as
to which any covenant, representation or warranty contained in the Loan
Documents with respect to such Account Receivable has been breached;

          (d)     that
is not owned by Borrower or is subject to any right, claim or interest of
another Person other than the Lien in favor of Lender;

          (e)     with
respect to which an invoice has not been sent;

          (f)     that
arises from the sale of defense articles or defense services;

          (g)     that
is due and payable from a Buyer located in a country with which Ex-Im Bank is
prohibited from doing business as designated in the Country Limitation
Schedule;

          (h)     that
does not comply with the requirements of the Country Limitation Schedule;

          (i)     that
is due and payable more than one hundred eighty (180) days from the date of the
invoice;

          (j)     that
is not paid within sixty (60) calendar days from its original due date, unless
it is insured through Ex-Im Bank export credit insurance for comprehensive commercial
and political risk, or through Ex-Im Bank approved private insurers for
comparable coverage, in which case it is not paid within ninety (90) calendar
days from its due date;

          (k)     that
arises from a sale of goods to or performance of services for an employee of
Borrower, a stockholder of Borrower, a subsidiary of Borrower, a Person with a
controlling interest in Borrower or a Person which shares common controlling
ownership with Borrower;

          (l)     that
is backed by a letter of credit unless the Items covered by the subject letter
of credit have been shipped;

          (m)     that
Lender or Ex-Im Bank, in its reasonable judgment, deems uncollectible for any
reason;

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          (n)     that
is due and payable in a currency other than Dollars, except as may be approved
in writing by Ex-Im Bank;

          (o)     that
is due and payable from a military Buyer, except as may be approved in writing
by Ex-Im Bank;

          (p)     that
does not comply with the terms of sale set forth in Section 7 of the Loan
Authorization Agreement;

          (q)     that
is due and payable from a Buyer who (i) applies for, suffers, or consents to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property
or calls a meeting of its creditors, (ii) admits in writing its inability, or
is generally unable, to pay its debts as they become due or ceases operations
of its present business, (iii) makes a general assignment for the benefit of
creditors, (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as bankrupt
or insolvent, (vi) files a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesces to, or fails to have
dismissed, any petition which is filed against it in any involuntary case under
such bankruptcy laws, or (viii) takes any action for the purpose of effecting
any of the foregoing;

          (r)     that
arises from a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment or any other repurchase or return basis or is evidenced
by chattel paper;

          (s)     for
which the Items giving rise to such Account Receivable have not been shipped
and delivered to and accepted by the Buyer or the services giving rise to such
Account Receivable have not been performed by Borrower and accepted by the
Buyer or the Account Receivable otherwise does not represent a final sale;

          (t)     that
is subject to any offset, deduction, defense, dispute, or counterclaim or the
Buyer is also a creditor or supplier of Borrower or the Account Receivable is
contingent in any respect or for any reason;

          (u)     for
which Borrower has made any agreement with the Buyer for any deduction therefrom,
except for discounts or allowances made in the ordinary course of business for
prompt payment, all of which discounts or allowances are reflected in the
calculation of the face value of each respective invoice related thereto; or

          (v)     for
which any of the Items giving rise to such Account Receivable have been
returned, rejected or repossessed.

          “Eligible
Export-Related Inventory” shall mean Export-Related Inventory which is
acceptable to Lender and which is deemed to be eligible pursuant to the Loan
Documents, but in no event shall Eligible Export-Related Inventory include any
Inventory:

          (a)     that
is not subject to a valid, perfected first priority Lien in favor of Lender;

          (b)     that
is located at an address that has not been disclosed to Lender in writing;

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          (c)     that
is placed by Borrower on consignment or held by Borrower on consignment from
another Person;

          (d)     that
is in the possession of a processor or bailee, or located on premises leased or
subleased to Borrower, or on premises subject to a mortgage in favor of a
Person other than Lender, unless such processor or bailee or mortgagee or the
lessor or sublessor of such premises, as the case may be, has executed and delivered
all documentation which Lender shall require to evidence the subordination or
other limitation or extinguishment of such Person’s rights with respect to such
Inventory and Lender’s right to gain access thereto;

          (e)     that
is produced in violation of the Fair Labor Standards Act or subject to the “hot
goods” provisions contained in 29 US.C.§215 or any successor statute or
section;

          (f)     as
to which any covenant, representation or warranty with respect to such
Inventory contained in the Loan Documents has been breached;

          (g)     that
is not located in the United States;

          (h)     that
is demonstration Inventory;

          (i)     that
consists of proprietary software (i.e. software designed solely for Borrower’s
internal use and not intended for resale);

          (j)     that
is damaged, obsolete, returned, defective, recalled or unfit for further
processing;

          (k)     that
has been previously exported from the United States;

          (l)     that
constitutes defense articles or defense services;

          (m)     that
is to be incorporated into Items destined for shipment to a country as to which
Ex-Im Bank is prohibited from doing business as designated in the Country Limitation
Schedule;

          (n)     that
is to be incorporated into Items destined for shipment to a Buyer located in a
country in which Ex-Im Bank coverage is not available for commercial reasons as
designated in the Country Limitation Schedule, unless and only to the extent
that such Items are to be sold to such country on terms of a letter of credit
confirmed by a bank acceptable to Ex-Im Bank; or

          (o)     that
is to be incorporated into Items whose sale would result in an Account
Receivable which would not be an Eligible Export-Related Account Receivable.

          “Eligible
Person” shall mean a sole proprietorship, partnership, limited liability
partnership, corporation or limited liability company which (a) is domiciled,
organized, or formed, as the case may be, in the United States; (b) is in good
standing in the state of its formation or otherwise authorized to conduct
business in the United States; (c) is not currently suspended or debarred from
doing business with the United States government or any instrumentality, division,
agency or department thereof; (d) exports or plans to export Items;
(e) operates and has operated as a going concern for at least one (1)
year; (f) has a positive 

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tangible net worth
determined in accordance with GAAP; and (g) has revenue generating operations
relating to its core business activities for at least one year.

          “ERISA”
shall mean the Employee Retirement Income Security Act of 1974 and the rules
and regulations promulgated thereunder.

          “Export
Order” shall mean a written export order or contract for the purchase by the
Buyer from Borrower of any of the Items.

          “Export-Related
Accounts Receivable” shall mean those Accounts Receivable arising from the sale
of Items which are due and payable to Borrower in the United States.

          “Export-Related
Accounts Receivable Value” shall mean, at the date of determination thereof,
the aggregate face amount of Eligible Export-Related Accounts Receivable less
taxes, discounts, credits, allowances and Retainages, except to the extent
otherwise permitted by Ex-Im Bank in writing.

          “Export-Related
Borrowing Base” shall mean, at the date of determination thereof, the sum of
(a) the Export-Related Inventory Value multiplied by the Advance Rate
applicable to Export-Related Inventory set forth in Section 5(C)(1) of the Loan
Authorization Agreement, (b) the Export-Related Accounts Receivable Value
multiplied by the Advance Rate applicable to Export-Related Accounts Receivable
set forth in Section 5(C)(2) of the Loan Authorization Agreement, (c) if
permitted by Ex-Im Bank in writing, the Retainage Value multiplied by the
Retainage Advance Rate set forth in Section 5(C)(3) of the Loan Authorization
Agreement and (d) the Other Assets Value multiplied by the Advance Rate applicable
to Other Assets set forth in Section 5(C)(4) of the Loan Authorization
Agreement.

          “Export-Related
Borrowing Base Certificate” shall mean a certificate in the form provided or
approved by Lender, executed by Borrower and delivered to Lender pursuant to
the Loan Documents detailing the Export-Related Borrowing Base supporting the
Credit Accommodations which reflects, to the extent included in the
Export-Related Borrowing Base, Export-Related Accounts Receivable, Eligible
Export-Related Accounts Receivable, Export-Related Inventory and Eligible
Export-Related Inventory balances that have been reconciled with Borrower’s
general ledger, Accounts Receivable aging report and Inventory schedule.

          “Export-Related
General Intangibles” shall mean those General Intangibles necessary or
desirable to or for the disposition of Export-Related Inventory.

          “Export-Related
Inventory” shall mean the Inventory of Borrower located in the United States
that has been purchased, manufactured or otherwise acquired by Borrower for
resale pursuant to Export Orders.

          “Export-Related
Inventory Value” shall mean, at the date of determination thereof, the lower of
cost or market value of Eligible Export-Related Inventory of Borrower as
determined in accordance with GAAP.

          “Final
Disbursement Date” shall mean, unless subject to an extension of such date
agreed to by Ex-Im Bank, the last date on which Lender may make a Disbursement
set forth in Section 

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10 of the Loan
Authorization Agreement or, if such date is not a Business Day, the next
succeeding Business Day; provided, however, to the extent that
Lender has not received cash collateral or an indemnity with respect to Letter
of Credit Obligations outstanding on the Final Disbursement Date, the Final
Disbursement Date with respect to an advance to fund a drawing under a Letter
of Credit shall be no later than thirty (30) Business Days after the expiry
date of the Letter of Credit related thereto.

          “GAAP”
shall mean the generally accepted accounting principles issued by the American
Institute of Certified Public Accountants as in effect from time to time.

          “General
Intangibles” shall mean all intellectual property and other “general
intangibles” (as such term is defined in the UCC) necessary or desirable to or
for the disposition of Inventory.

          “Guarantor”
shall mean each Person, if any, identified in Section 3 of the Loan
Authorization Agreement who shall guarantee (jointly and severally if more than
one) the payment and performance of all or a portion of the Loan Facility
Obligations.

          “Guaranty
Agreement” shall mean a valid and enforceable agreement of guaranty executed by
each Guarantor in favor of Lender.

          “Inventory”
shall mean all “inventory” (as such term is defined in the UCC), now or
hereafter owned or acquired by Borrower, wherever located, including all
inventory, merchandise, goods and other personal property which are held by or
on behalf of Borrower for sale or lease or are furnished or are to be furnished
under a contract of service or which constitute raw materials, work in process
or materials used or consumed or to be used or consumed in Borrower’s business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including other supplies.

          “ISP”
shall mean the International Standby Practices-ISP98, International Chamber of
Commerce Publication No. 590 and any amendments and revisions thereof.

          “Issuing
Bank” shall mean the bank that issues a Letter of Credit, which bank is Lender
itself or a bank that Lender has caused to issue a Letter of Credit by way of
guarantee.

          “Items”
shall mean the finished goods or services which are intended for export from
the United States, as specified in Section 4(A) of the Loan Authorization
Agreement.

          “Letter
of Credit” shall mean a Commercial Letter of Credit or a Standby Letter of
Credit.

          “Letter
of Credit Obligations” shall mean all outstanding obligations incurred by Lender,
whether direct or indirect, contingent or otherwise, due or not due, in
connection with the issuance or guarantee by Lender or the Issuing Bank of
Letters of Credit.

          “Lien”
shall mean any mortgage, security deed or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
security title, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing 

7










lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the UCC or comparable law of any jurisdiction) by which property
is encumbered or otherwise charged.

          “Loan
Agreement” shall mean a valid and enforceable agreement between Lender and
Borrower setting forth the terms and conditions of the Loan Facility.

          “Loan
Authorization Agreement” shall mean the Loan Authorization Agreement entered
into between Lender and Ex-Im Bank or the Loan Authorization Notice setting
forth certain terms and conditions of the Loan Facility, a copy of which is
attached hereto as Annex A.

          “Loan
Authorization Notice” shall mean the Loan Authorization Notice executed by
Lender and delivered to Ex-Im Bank in accordance with the Delegated Authority
Letter Agreement setting forth the terms and conditions of each Loan Facility.

          “Loan
Documents” shall mean the Loan Authorization Agreement, the Loan Agreement,
this Agreement, each promissory note (if applicable), each Guaranty Agreement,
and all other instruments, agreements and documents now or hereafter executed
by Borrower or any Guarantor evidencing, securing, guaranteeing or otherwise
relating to the Loan Facility or any Credit Accommodations made thereunder.

          “Loan
Facility” shall mean the Revolving Loan Facility, the Transaction Specific Loan
Facility or the Transaction Specific Revolving Loan Facility established by
Lender in favor of Borrower under the Loan Documents.

          “Loan
Facility Obligations” shall mean all loans, advances, debts, expenses, fees,
liabilities, and obligations for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or amounts are liquidated or determinable) owing by
Borrower to Lender, of any kind or nature, present or future, arising in
connection with the Loan Facility.

          “Loan
Facility Term” shall mean the number of months from the Effective Date to the
Final Disbursement Date as originally set forth in the Loan Authorization
Agreement.

          “Master
Guarantee Agreement” shall mean the Master Guarantee Agreement between Ex-Im
Bank and Lender, as amended, modified, supplemented and restated from time to
time.

          “Material
Adverse Effect” shall mean a material adverse effect on (a) the business,
assets, operations, prospects or financial or other condition of Borrower or
any Guarantor, (b) Borrower’s ability to pay or perform the Loan Facility
Obligations in accordance with the terms thereof, (c) the Collateral or
Lender’s Liens on the Collateral or the priority of such Lien or (d) Lender’s
rights and remedies under the Loan Documents.

          “Maximum
Amount” shall mean the maximum principal balance of Credit Accommodations that
may be outstanding at any time under the Loan Facility specified in Section
5(A) of the Loan Authorization Agreement.

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          “Other
Assets” shall mean the Collateral, if any, described in Section 5(C)(4) of the
Loan Authorization Agreement.

          “Other
Assets Value” shall mean, at the date of determination thereof, the value of
the Other Assets as determined in accordance with GAAP.

          “Permitted
Liens” shall mean (a) Liens for taxes, assessments or other governmental
charges or levies not delinquent, or, being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by Borrower; provided, that, the Lien shall have no effect
on the priority of the Liens in favor of Lender or the value of the assets in
which Lender has such a Lien and a stay of enforcement of any such Lien shall
be in effect; (b) deposits or pledges securing obligations under worker’s
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (c) deposits or pledges securing bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of Borrower’s business; (d) judgment Liens that
have been stayed or bonded; (e) mechanics’, workers’, materialmen’s or
other like Liens arising in the ordinary course of Borrower’s business with
respect to obligations which are not due; (f) Liens placed upon fixed assets
hereafter acquired to secure a portion of the purchase price thereof, provided,
that, any such Lien shall not encumber any other property of Borrower; (g)
security interests being terminated concurrently with the execution of the Loan
Documents; (h) Liens in favor of Lender securing the Loan Facility Obligations;
and (i) Liens disclosed in Section 6(D) of the Loan Authorization Agreement.

          “Person”
shall mean any individual, sole proprietorship, partnership, limited liability
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit
corporation, entity or government (whether national, federal, provincial,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof), and shall include such Person’s
successors and assigns.

          “Principals”
shall mean any officer, director, owner, partner, key employee, or other Person
with primary management or supervisory responsibilities with respect to
Borrower or any other Person (whether or not an employee) who has critical
influence on or substantive control over the transactions covered by this
Agreement.

          “Retainage”
shall mean that portion of the purchase price of an Export Order that a Buyer
is not obligated to pay until the end of a specified period of time following
the satisfactory performance under such Export Order.

          “Retainage
Accounts Receivable” shall mean those portions of Eligible Export-Related
Accounts Receivable arising out of a Retainage.

          “Retainage
Advance Rate” shall mean the percentage rate specified in Section 5(C)(3) of
the Loan Authorization Agreement as the Advance Rate for the Retainage Accounts
Receivable of Borrower.

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          “Retainage
Value” shall mean, at the date of determination thereof, the aggregate face
amount of Retainage Accounts Receivable, less taxes, discounts, credits and
allowances, except to the extent otherwise permitted by Ex-Im Bank in writing.

          “Revolving
Loan Facility” shall mean the credit facility or portion thereof established by
Lender in favor of Borrower for the purpose of providing pre-export working
capital in the form of loans and/or Letters of Credit to finance the
manufacture, production or purchase and subsequent export sale of Items
pursuant to Loan Documents under which Credit Accommodations may be made and
repaid on a continuous basis based solely on the Export-Related Borrowing Base
during the term of such credit facility.

          “Special
Conditions” shall mean those conditions, if any, set forth in Section 13 of the
Loan Authorization Agreement.

          “Specific
Export Orders” shall mean those Export Orders specified in Section 5(D) of the
Loan Authorization Agreement.

          “Standby
Letter of Credit” shall mean those letters of credit subject to the ISP or UCP
issued or caused to be issued by Lender for Borrower’s account that can be
drawn upon by a Buyer only if Borrower fails to perform all of its obligations
with respect to an Export Order.

          “Transaction
Specific Loan Facility” shall mean a credit facility or a portion thereof
established by Lender in favor of Borrower for the purpose of providing
pre-export working capital in the form of loans and/or Letters of Credit to
finance the manufacture, production or purchase and subsequent export sale of
Items pursuant to Loan Documents under which Credit Accommodations are made
based solely on the Export-Related Borrowing Base relating to Specific Export
Orders and once such Credit Accommodations are repaid they may not be
reborrowed.

          “Transaction
Specific Revolving Loan Facility” shall mean a Revolving Credit Facility
established to provide financing of Specific Export Orders.

          “UCC”
shall mean the Uniform Commercial Code as the same may be in effect from time
to time in the jurisdiction in which Borrower or Collateral is located.

          “UCP”
shall mean the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 and any
amendments and revisions thereof.

          “U.S.”
or “United States” shall mean the United States of America and its territorial
possessions.

          “U.S.
Content” shall mean with respect to any Item all the labor, materials and
services which are of U.S. origin or manufacture, and which are incorporated
into an Item in the United States.

          “Warranty”
shall mean Borrower’s guarantee to Buyer that the Items will function as
intended during the warranty period set forth in the applicable Export Order.

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          “Warranty
Letter of Credit” shall mean a Standby Letter of Credit which is issued or
caused to be issued by Lender to support the obligations of Borrower with
respect to a Warranty or a Standby Letter of Credit which by its terms becomes
a Warranty Letter of Credit.

1.02   Rules
of Construction.  For purposes of
this Agreement, the following additional rules of construction shall apply,
unless specifically indicated to the contrary: (a) wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the feminine and the
neuter; (b) the term “or” is not exclusive; (c) the term “including” (or any
form thereof) shall not be limiting or exclusive; (d) all references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations; (e) the words “this Agreement”, “herein”,
“hereof”, “hereunder” or other words of similar import refer to this Agreement
as a whole including the schedules, exhibits, and annexes hereto as the same
may be amended, modified or supplemented; (f) all references in this Agreement
to sections, schedules, exhibits, and annexes shall refer to the corresponding
sections, schedules, exhibits, and annexes of or to this Agreement; and (g) all
references to any instruments or agreements, including references to any of the
Loan Documents, or the Delegated Authority Letter Agreement shall include any
and all modifications, amendments and supplements thereto and any and all
extensions or renewals thereof to the extent permitted under this Agreement.

1.03   Incorporation
of Recitals.  The Recitals to this
Agreement are incorporated into and shall constitute a part of this Agreement.

ARTICLE
II

OBLIGATIONS OF BORROWER

          Until
payment in full of all Loan Facility Obligations and termination of the Loan
Documents, Borrower agrees as follows:

2.01   Use
of Credit Accommodations. 
(a) Borrower shall use Credit Accommodations only for the purpose
of enabling Borrower to finance the cost of manufacturing, producing,
purchasing or selling the Items. Borrower may not use any of the Credit
Accommodations for the purpose of: (i) servicing or repaying any of Borrower’s
pre-existing or future indebtedness unrelated to the Loan Facility (unless
approved by Ex-Im Bank in writing); (ii) acquiring fixed assets or capital
goods for use in Borrower’s business; (iii) acquiring, equipping or renting
commercial space outside of the United States; (iv) paying the salaries of non
U.S. citizens or non-U.S. permanent residents who are located in offices
outside of the United States; or (v) in connection with a Retainage or Warranty
(unless approved by Ex-Im Bank in writing).

          (b)     In
addition, no Credit Accommodation may be used to finance the manufacture,
purchase or sale of any of the following:

                    (i)        Items
to be sold or resold to a Buyer located in a country as to which Ex-Im Bank is
prohibited from doing business as designated in the Country Limitation
Schedule;

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                    (ii)       that
part of the cost of the Items which is not U.S. Content unless such part is not
greater than fifty percent (50%) of the cost of the Items and is incorporated
into the Items in the United States;

                    (iii)     defense
articles or defense services; or

                    (iv)      without
Ex-Im Bank’s prior written consent, any Items to be used in the construction,
alteration, operation or maintenance of nuclear power, enrichment,
reprocessing, research or heavy water production facilities.

2.02   Loan
Documents and Loan Authorization Agreement.  (a) Each Loan Document and this Agreement have been duly executed
and delivered on behalf of Borrower, and each such Loan Document and this
Agreement are and will continue to be a legal and valid obligation of Borrower,
enforceable against it in accordance with its terms.

          (b)     Borrower
shall comply with all of the terms and conditions of the Loan Documents, this
Agreement and the Loan Authorization Agreement.

2.03   Export-Related
Borrowing Base Certificates and Export Orders.  In order to receive Credit Accommodations under the Loan
Facility, Borrower shall have delivered to Lender an Export-Related Borrowing
Base Certificate as frequently as required by Lender but at least within the
past thirty (30) calendar days and a copy of the Export Order(s) (or, for
Revolving Loan Facilities, if permitted by Lender, a written summary of the
Export Orders) against which Borrower is requesting Credit Accommodations. If
Lender permits summaries of Export Orders, Borrower shall also deliver promptly
to Lender copies of any Export Orders requested by Lender. In addition, so long
as there are any Credit Accommodations outstanding under the Loan Facility,
Borrower shall deliver to Lender at least once each month no later than the
twentieth (20th) day of such month or more frequently as required by the Loan
Documents, an Export-Related Borrowing Base Certificate.

2.04   Exclusions
from the Export-Related Borrowing Base. 
In determining the Export-Related Borrowing Base, Borrower shall exclude
therefrom Inventory which is not Eligible Export-Related Inventory and Accounts
Receivable which are not Eligible Export-Related Accounts Receivable. Borrower
shall promptly, but in any event within five (5) Business Days, notify Lender
(a) if any then existing Export-Related Inventory no longer constitutes
Eligible Export-Related Inventory or (b) of any event or circumstance which to
Borrower’s knowledge would cause Lender to consider any then existing
Export-Related Accounts Receivable as no longer constituting an Eligible
Export-Related Accounts Receivable.

2.05   Financial
Statements.  Borrower shall deliver
to Lender the financial statements required to be delivered by Borrower in
accordance with Section 11 of the Loan Authorization Agreement.

2.06   Schedules,
Reports and Other Statements. 
Borrower shall submit to Lender in writing each month (a) an Inventory
schedule for the preceding month and (b) an Accounts Receivable aging report
for the preceding month detailing the terms of the amounts due from each Buyer.
Borrower shall also furnish to Lender promptly upon request such information,
reports, 

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contracts, invoices and
other data concerning the Collateral as Lender may from time to time specify.

2.07   Additional
Security or Payment.  (a) Borrower
shall at all times ensure that the Export-Related Borrowing Base equals or
exceeds the Credit Accommodation Amount. If informed by Lender or if Borrower
otherwise has actual knowledge that the Export-Related Borrowing Base is at any
time less than the Credit Accommodation Amount, Borrower shall, within five (5)
Business Days, either (i) furnish additional Collateral to Lender, in form and
amount satisfactory to Lender and Ex-Im Bank or (ii) pay to Lender an amount
equal to the difference between the Credit Accommodation Amount and the
Export-Related Borrowing Base.

          (b)     For
purposes of this Agreement, in determining the Export-Related Borrowing Base
there shall be deducted from the Export-Related Borrowing Base (i) an amount
equal to twenty-five percent (25%) of the outstanding face amount of Commercial
Letters of Credit and Standby Letters of Credit and (ii) one hundred percent
(100%) of the face amount of Warranty Letters of Credit less the amount of cash
collateral held by Lender to secure Warranty Letters of Credit.

          (c)     Unless
otherwise approved in writing by Ex-Im Bank, for Revolving Loan Facilities
(other than Transaction Specific Revolving Loan Facilities), Borrower shall at
all times ensure that the outstanding principal balance of the Credit
Accommodations that is supported by Export-Related Inventory does not exceed
sixty percent (60%) of the sum of the total outstanding principal balance of
the Disbursements and the undrawn face amount of all outstanding Commercial
Letters of Credit. If informed by Lender or if Borrower otherwise has actual
knowledge that the outstanding principal balance of the Credit Accommodations
that is supported by Inventory exceeds sixty percent (60%) of the sum of the
total outstanding principal balance of the Disbursements and the undrawn face
amount of all outstanding Commercial Letters of Credit, Borrower shall, within
five (5) Business Days, either (i) furnish additional non-Inventory Collateral
to Lender, in form and amount satisfactory to Lender and Ex-Im Bank, or (ii)
pay down the applicable portion of the Credit Accommodations so that the above
described ratio is not exceeded.

2.08   Continued
Security Interest.  Borrower shall
not change (a) its name or identity in any manner, (b) the location of its
principal place of business, (c) the location of any of the Collateral or (d)
the location of any of the books or records related to the Collateral, in each
instance without giving thirty (30) days prior written notice thereof to Lender
and taking all actions deemed necessary or appropriate by Lender to
continuously protect and perfect Lender’s Liens upon the Collateral.

2.09   Inspection
of Collateral.  Borrower shall
permit the representatives of Lender and Ex-Im Bank to make at any time during
normal business hours inspections of the Collateral and of Borrower’s
facilities, activities, and books and records, and shall cause its officers and
employees to give full cooperation and assistance in connection therewith.

2.10   General
Intangibles.  Borrower represents
and warrants that it owns, or is licensed to use, all General Intangibles
necessary to conduct its business as currently conducted except where the 

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failure of Borrower to
own or license such General Intangibles could not reasonably be expected to
have a Material Adverse Effect.

2.11   Notice
of Certain Events.  Borrower shall
promptly, but in any event within five (5) Business Days, notify Lender in
writing of the occurrence of any of the following:

          (a)     Borrower
or any Guarantor (i) applies for, consents to or suffers the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or
similar fiduciary of itself or of all or a substantial part of its property or
calls a meeting of its creditors, (ii) admits in writing its inability, or is
generally unable, to pay its debts as they become due or ceases operations of
its present business, (iii) makes a general assignment for the benefit of
creditors, (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as bankrupt
or insolvent, (vi) files a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesces to, or fails to have
dismissed within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) takes any action for the
purpose of effecting any of the foregoing;

          (b)     any
Lien in any of the Collateral, granted or intended by the Loan Documents to be
granted to Lender, ceases to be a valid, enforceable, perfected, first priority
Lien (or a lesser priority if expressly permitted pursuant to Section 6 of the
Loan Authorization Agreement) subject only to Permitted Liens;

          (c)     the
issuance of any levy, assessment, attachment, seizure or Lien, other than a
Permitted Lien, against any of the Collateral which is not stayed or lifted
within thirty (30) calendar days;

          (d)     any
proceeding is commenced by or against Borrower or any Guarantor for the
liquidation of its assets or dissolution;

          (e)     any
litigation is filed against Borrower or any Guarantor which has had or could
reasonably be expected to have a Material Adverse Effect and such litigation is
not withdrawn or dismissed within thirty (30) calendar days of the filing thereof;

          (f)     any
default or event of default under the Loan Documents;

          (g)     any
failure to comply with any terms of the Loan Authorization Agreement;

          (h)     any
material provision of any Loan Document or this Agreement for any reason ceases
to be valid, binding and enforceable in accordance with its terms;

          (i)     any
event which has had or could reasonably be expected to have a Material Adverse
Effect; or

          (j)     the
Credit Accommodation Amount exceeds the applicable Export-Related Borrowing
Base.

2.12   Insurance.  Borrower will at all times carry property,
liability and other insurance, with insurers acceptable to Lender, in such form
and amounts, and with such deductibles and other 

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provisions, as Lender
shall require, and Borrower will provide evidence of such insurance to Lender,
so that Lender is satisfied that such insurance is, at all times, in full force
and effect. Each property insurance policy shall name Lender as loss payee and
shall contain a lender’s loss payable endorsement in form acceptable to Lender
and each liability insurance policy shall name Lender as an additional insured.
All policies of insurance shall provide that they may not be cancelled or
changed without at least ten (10) days’ prior written notice to Lender and
shall otherwise be in form and substance satisfactory to Lender. Borrower will
promptly deliver to Lender copies of all reports made to insurance companies.


2.13   Taxes.  Borrower has timely filed all tax returns
and reports required by applicable law, has timely paid all applicable taxes,
assessments, deposits and contributions owing by Borrower and will timely pay
all such items in the future as they became due and payable. Borrower may,
however, defer payment of any contested taxes; provided, that Borrower (a) in
good faith contests Borrower’s obligation to pay such taxes by appropriate
proceedings promptly and diligently instituted and conducted; (b) notifies
Lender in writing of the commencement of, and any material development in, the
proceedings; (c) posts bonds or takes any other steps required to keep the
contested taxes from becoming a Lien upon any of the Collateral; and (d)
maintains adequate reserves therefor in conformity with GAAP.

2.14   Compliance
with Laws.  Borrower represents and
warrants that it has complied in all material respects with all provisions of
all applicable laws and regulations, including those relating to Borrower’s
ownership of real or personal property, the conduct and licensing of Borrower’s
business, the payment and withholding of taxes, ERISA and other employee
matters, safety and environmental matters.

2.15   Negative
Covenants.  Without the prior
written consent of Ex-Im Bank and Lender, Borrower shall not (a) merge, consolidate
or otherwise combine with any other Person; (b) acquire all or
substantially all of the assets or capital stock of any other Person; (c) sell,
lease, transfer, convey, assign or otherwise dispose of any of its assets,
except for the sale of Inventory in the ordinary course of business and the
disposition of obsolete equipment in the ordinary course of business; (d)
create any Lien on the Collateral except for Permitted Liens; (e) make any
material changes in its organizational structure or identity; or (f) enter into
any agreement to do any of the foregoing.

2.16   Reborrowings
and Repayment Terms.  (a) If the
Loan Facility is a Revolving Loan Facility, provided that Borrower is not in
default under any of the Loan Documents, Borrower may borrow, repay and
reborrow amounts under the Loan Facility until the close of business on the
Final Disbursement Date. Unless the Revolving Loan Facility is renewed or
extended by Lender with the consent of Ex-Im Bank, Borrower shall pay in full
the outstanding Loan Facility Obligations and all accrued and unpaid interest
thereon no later than the first Business Day after the Final Disbursement Date.

          (b)     If
the Loan Facility is a Transaction Specific Loan Facility, Borrower shall,
within two (2) Business Days of the receipt thereof, pay to Lender (for
application against the outstanding Loan Facility Obligations and accrued and
unpaid interest thereon) all checks, drafts, cash and other remittances it may
receive in payment or on account of the Export-Related Accounts Receivable or
any other Collateral, in precisely the form received (except for the 

15










endorsement of
Borrower where necessary). Pending such deposit, Borrower shall hold such
amounts in trust for Lender separate and apart and shall not commingle any such
items of payment with any of its other funds or property.

2.17   Cross
Default.  Borrower shall be deemed
in default under the Loan Facility if Borrower fails to pay when due any amount
payable to Lender under any loan or other credit accommodations to Borrower
whether or not guaranteed by Ex-Im Bank.

2.18   Munitions
List.  If any of the Items are
articles, services, or related technical data that are listed on the United
States Munitions List (part 121 of title 22 of the Code of Federal Regulations),
Borrower shall send a written notice promptly, but in any event within five (5)
Business Days, of Borrower learning thereof to Lender describing the Items(s)
and the corresponding invoice amount.

2.19   Suspension
and Debarment, etc.  On the date of
this Agreement neither Borrower nor its Principals are (a) debarred, suspended,
proposed for debarment with a final determination still pending, declared
ineligible or voluntarily excluded (as such terms are defined under any of the
Debarment Regulations referred to below) from participating in procurement or
nonprocurement transactions with any United States federal government
department or agency pursuant to any of the Debarment Regulations or (b)
indicted, convicted or had a civil judgment rendered against Borrower or any of
its Principals for any of the offenses listed in any of the Debarment
Regulations. Unless authorized by Ex-Im Bank, Borrower will not knowingly enter
into any transactions in connection with the Items with any person who is debarred,
suspended, declared ineligible or voluntarily excluded from participation in
procurement or nonprocurement transactions with any United States federal
government department or agency pursuant to any of the Debarment Regulations.
Borrower will provide immediate written notice to Lender if at any time it
learns that the certification set forth in this Section 2.19 was erroneous when
made or has become erroneous by reason of changed circumstances.

ARTICLE
III

RIGHTS AND REMEDIES

3.01   Indemnification.  Upon Ex-Im Bank’s payment of a Claim to
Lender in connection with the Loan Facility pursuant to the Master Guarantee
Agreement, Ex-Im Bank may assume all rights and remedies of Lender under the
Loan Documents and may enforce any such rights or remedies against Borrower,
the Collateral and any Guarantors. Borrower shall hold Ex-Im Bank and Lender
harmless from and indemnify them against any and all liabilities, damages,
claims, costs and losses incurred or suffered by either of them resulting from
(a) any materially incorrect certification or statement knowingly made by
Borrower or its agent to Ex-Im Bank or Lender in connection with the Loan
Facility, this Agreement, the Loan Authorization Agreement or any other Loan
Documents or (b) any material breach by Borrower of the terms and conditions of
this Agreement, the Loan Authorization Agreement or any of the other Loan
Documents. Borrower also acknowledges that any statement, certification or
representation made by Borrower in connection with the Loan Facility is subject
to the penalties provided in Article 18 U.S.C. Section 1001.

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3.02   Liens.  Borrower agrees that any and all Liens
granted by it to Lender are also hereby granted to Ex-Im Bank to secure
Borrower’s obligation, however arising, to reimburse Ex-Im Bank for any
payments made by Ex-Im Bank pursuant to the Master Guarantee Agreement. Lender
is authorized to apply the proceeds of, and recoveries from, any property
subject to such Liens to the satisfaction of Loan Facility Obligations in accordance
with the terms of any agreement between Lender and Ex-Im Bank.

ARTICLE
IV

MISCELLANEOUS

4.01   Governing
Law.  This Agreement and the Loan
Authorization Agreement and the obligations arising under this Agreement and
the Loan Authorization Agreement shall be governed by, and construed in
accordance with, the law of the state governing the Loan Documents.

4.02   Notification.  All notices required by this Agreement shall
be given in the manner and to the parties provided for in the Loan Agreement.

4.03   Partial
Invalidity.  If at any time any of
the provisions of this Agreement becomes illegal, invalid or unenforceable in
any respect under the law of any jurisdiction, neither the legality, the
validity nor the enforceability of the remaining provisions hereof shall in any
way be affected or impaired.

4.04   Waiver
of Jury Trial.  BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WANES ANY AND ALL RIGHTS IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, PROCEEDING OR OTHER LITIGATION
BROUGHT TO RESOLVE ANY DISPUTE ARISING UNDER, ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT, ANY LOAN DOCUMENT, OR
ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OR OMMISSIONS OF LENDER, EX-IM BANK, OR
ANY OTHER PERSON, RELATING TO THIS AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT
OR ANY OTHER LOAN DOCUMENT.

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          IN
WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed as of
the 4th day of February, 2004.

	
  MAXWELL TECHNOLOGIES, INC.
	
   

	
   
	
   

	
  By:
	
   

	
   
	
  



  	
   

	
                 (Signature)
	
   

	
   
	
   

	
  Name:
	
   

	
   
	
  



  	
   

	
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  ACKNOWLEDGED:
	
   

	
   
	
   

	
  SILICON VALLEY BANK
	
   

	
   
	
   

	
  By:
	
   

	
   
	
  



  	
   

	
                 (Signature)
	
   

	
   
	
   

	
  Name:
	
   

	
   
	
  



  	
   

	
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ANNEXES:

Annex A - Loan Authorization Agreement or Loan Authorization Notice

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